The SEC’s inspection on the operation of Huobi as a digital asset exchange operator during February 2021 - March 2021 detected deficiencies and insufficiency in Huobi’s management structure and work systems, causing the company to fail to operate its business in compliance with the governing regulations. Therefore, on 19 March 2021, by virtue of Section 35 Paragraph 1 of the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018) (Emergency Decree), the SEC Board Meeting No. 5/2564 passed a resolution ordering Huobi to rectify its work systems, but Huobi failed to do so within deadline. On 1 April 2021, by virtue of Section 35 Paragraph 2 of the Emergency Decree, the SEC  Board Meeting No. 6/2564 passed a resolution ordering Huobi to suspend its services temporarily and rectify the deficiencies of its work systems within deadline, and ordering Huobi to return assets to clients as per their request. Huobi requested extensions of deadline many times and the SEC Board granted the final extension until 31 August 2021. However, Huobi still failed to complete the rectification of its work systems within the specified deadline.

On 2 September 2021, the SEC Board Meeting No. 15/2564 viewed that Huobi had failed to rectify its work systems to comply with the governing regulations, as ordered even though the SEC Board granted many deadline extensions to Huobi, as requested.  The total granted rectification period lasted for five months and 12 days. The key work systems for business operation that the company failed to rectify were the trading system, the asset custody system and the information technology system. In this regard, Huobi notified that the company was in negotiation for procurement of new work systems and requested further extension of deadline. Nevertheless, no facts appeared to demonstrate that Huobi would be able to rectify its work systems and ensure readiness of its personnel in accordance with the governing regulations within the requested extension of deadline. 

Therefore, by virtue of Section 35 Paragraph 3 of the Emergency Decree and Clause 7 of the Notification of the Ministry of Finance Re: Licensing of Digital Asset Businesses B.E. 2561 (2018), the SEC Board has proposed that Minister of Finance consider revocation of the digital asset exchange license of Huobi. In addition, the SEC Board, by virtue of Section 35 Paragraph 2 of the Emergency Decree, has ordered Huobi to continue suspending its digital asset exchange service and return assets to the clients or buy assets back from the clients within three months as from 2 September 2021, the issue date of the SEC Board’s order. If the clients do not take assets back within deadline,  Huobi is required to deposit the clients’ assets in a secure system.

__________________________